Hafner & Hafner
[2023] FedCFamC1F 769
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Hafner & Hafner [2023] FedCFamC1F 769
File number(s): SYC 4156 of 2022 Judgment of: TREE J Date of judgment: 7 September 2023 Catchwords: FAMILY LAW – PARENTING – Where the parties sought parenting orders in respect of their eight year old child – Where both parties sought equal shared parental responsibility – Where there was slender disparity in the parties’ proposals being how quickly the time which the child spends with the husband should increase, and when and at what frequency it should plateau – School holiday time in dispute – Where greater weight is given to the need to protect the child from harm – Where the Court is satisfied that the orders as proposed by the wife are more in the child’s best interests – Child to live with the mother and spend substantial and significant time with the father.
FAMILY LAW – PROPERTY – Where the husband contended for a 35/65 division of the parties’ property in his favour – Where the wife sought a 50/50 division – Where both parties contended equal contributions during the relationship – Where the husband made an overwhelmingly greater initial contribution than the wife – Where the post-separation contributions favoured the wife – Where the parties’ contribution based entitlements are found to be 35/65 in favour of the husband – Where an adjustment of 7.5 per cent for s 75(2) factors is made in favour of the wife – Where the property pool is to be divided 42.5/57.5 per cent in favour of the husband.
Legislation: Family Law Act 1975 (Cth) ss 60CC, 64B, 65DAA, 75, 79 Division: Division 1 First Instance Number of paragraphs: 95 Date of hearing: 13-15 June 2023 Place: Sydney Counsel for the Applicant: Mr Jauncey Solicitor for the Applicant: Jack Rigg Solicitors Counsel for the Respondent: Ms Otrebski Solicitor for the Respondent: Bennett & Philp Lawyers ORDERS
SYC 4156 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR HAFNER
Applicant
AND: MS HAFNER
Respondent
ORDER MADE BY:
TREE J
DATE OF ORDER:
7 SEPTEMBER 2023
THE COURT ORDERS THAT:
PARENTING
Parental responsibility
1.That the husband and the wife have equal shared parental responsibility for the major long-term issues of the child X, born 2015 (“the child”) including but not limited to the following:
(a)Schooling for the child including decisions about the type of schooling and the schools that he shall attend;
(b)Surgery, hospitalisations, specialist, and medical treatment required by the child for any serious injury, illness or disability;
(c)Psychological, psychiatric or other therapeutic counselling for the child;
(d)Decisions about the child playing or being involved in any sporting, cultural, artistic or community activities including concerts, competitions, training, or meetings, other developmental or extra-curricular activities that:
(i)Occur whilst the child is in the care of both parents;
(ii)Require both parents to actively be involved in;
(iii)Require both parents to financially contribute towards.
2.That the parents are to consult with each other about decisions to be made in the exercise of their equal shared parental responsibility as follows:
(a)They shall inform the other parent about the decision to be made;
(b)They shall consult with each other on terms that they agree; and
(c)They shall make a genuine effort to come to a joint decision.
3.That notwithstanding the provisions of Order 2, the parties each exercise sole parental responsibility for the day-to-day care, welfare, and development of the child during those times the child is in their respective individual care.
Living arrangements
4.Unless otherwise agreed between the parents in writing, the child shall live with the wife and spend time with the husband as specified below.
During school terms arrangements
5.From the date of these Orders and until the commencement of School Term 1 2024: from after school Friday afternoon (or 4:00pm on a non-school day) until 4:00pm on Sunday afternoon every second week.
6.From the commencement of School Term 1 2024 until the commencement of School Term 1 2025: from after school Friday afternoon (or 4:00pm on a non-school day) until before school Monday morning (or 9:00am on a non-school day) every second week.
7.From the commencement of School Term 1 2025 and thereafter: from after school Thursday afternoon (or 4:00pm on a non-school day) until before school Monday morning (or 9:00am on a non-school day) every second week.
School term holiday arrangements (Term 1, Term 2, Term 3)
8.During the commencement of these Orders and thereafter, but subject to Order 13(h), during Term 1, 2 and 3 school holidays:
(a)Week One: From Monday at 10:00am to Thursday at 10:00am;
(b)Week Two: From Thursday at 10:00am to Saturday at 10:00am.
9.The term time arrangements are suspended during school term holidays.
Christmas holidays/Term 4 School Holidays
10.During the 2023 Christmas holidays and ongoing thereafter: from the first Sunday of the school holidays at 4:00pm until Thursday at 4:00pm each alternative week throughout the Christmas/Term 4 school holidays.
11.The arrangements for special occasion time will prevail over Order 10 above.
12.The arrangements for school term are suspended during the Christmas holidays/Term 4 school holidays.
Special occasion time
13.The child shall spend time during special occasions (“special occasion time”) by written agreement and failing agreement, as follows, with usual time suspended during the special occasion time.
(a)For Christmas each year:
(i)In even years: with the wife from 3:00pm Christmas Eve to 3:00pm Christmas Day and with the husband from 3:00pm Christmas Day to 3:00pm Boxing Day.
(ii)In odd years: with the husband from 3:00pm Christmas Eve to 3:00pm Christmas Day and with the wife from 3:00pm Christmas Day to 3:00pm Boxing Day.
(b)For the child’s birthday each year:
(i)If a school day, from after school until 6:00pm with the parent the child did not wake up with on the child’s birthday; and
(ii)If a non-school day, from 1:00pm until 4:00pm with the parent the child did not wake up with on the child’s Birthday.
(c)For the wife’s birthday each year:
(i)If a school day, from after school until 6:00pm if the child is not ordinarily spending time with the wife;
(ii)If a non-school day, from 1:00pm until 4:00pm if the child is not ordinarily spending time with the wife.
(d)For the husband’s birthday each year:
(i)If a school day, from after school until 6:00pm if the child is not ordinarily spending time with the husband.
(ii)If a non-school day, from 1:00pm until 4:00pm if the child is not ordinarily spending time with the husband.
(e)For Mother’s Day, with the wife from 3:00pm the day before Mother’s Day until 3:00pm Mother’s Day.
(f)For Father’s Day, with the husband from 3:00pm the Day before Father’s Day until 3:00pm Father’s Day.
(g)For New Year’s Eve;
(i)In even years, with the husband from 3:00pm New Year’s Eve to 3:00pm New Year’s Day.
(ii)In odd years, with the wife from 3:00pm New Year’s Eve to 3:00pm New Year’s Day.
(h)For Easter time;
During Easter each year, the child will spend time with each of the parents as follows:
(i)In each even numbered year, the child will spend time with the wife from 6:00pm on Easter Saturday until 3:00pm on Easter Monday.
(ii)In each odd numbered year, the child will spend time with the husband from 6:00pm on Easter Saturday until 3:00pm on Easter Monday.
Changeovers
14.Unless otherwise agreed between the parents in writing, changeovers are to occur as follows:
(a)If a school day, changeovers shall occur at the child’s enrolled school and in relation to same:
(i)The parent commencing their time with the child is to be responsible to collect the child after school; and
(ii)The parent concluding their time with the child is to be responsible to deliver the child to school that day.
(b)If a non-school day, the changeover will occur at McDonalds at Suburb B.
15.That at changeovers, each parent shall return to the other parent the child’s school supplies, belongings and any clothing or shoes supplied by the other parent in a clean condition as far as reasonably practicable.
Communication with the Child
16.That the child be at liberty to contact either parent at any reasonable time that they express a wish to do so, and in that event, the parent with whom the child is with shall facilitate the child contacting the other parent by telephone and/or Facetime.
17.That each parent shall continue to maintain a mobile telephone service able to facilitate both telephone calls and Facetime.
18.That each parent shall ensure that the child has privacy during any conversations between the child and the other parent.
Communication between the parents
19.That both parents shall keep each other informed at all times of their residential address, telephone number/s including mobile telephone numbers and email addresses and advise the other parent of any change to such details forthwith and in any event by no later than twenty-four (24) hours of the change occurring.
20.That both parents shall keep the other parent informed at all times as to the names and addresses of any health practitioners, counsellors, psychologists, psychiatrists, or other health professionals attended upon by the child within forty-eight (48) hours of any appointments.
21.That both parents shall inform the other parent of any serious medical condition, significant health issue or illness suffered by the child as soon as reasonably practicable and in any event within twenty-four (24) hours and in the event the child attends hospital for any illness or injury the other parent shall be notified within two (2) hours.
22.That both parents shall inform the other parent of any specialist medical, optical, dental or health appointments (including counselling, psychiatric or any other therapeutic appointments) made in advance for the child within a reasonable period of notice and in any event at least three (3) days prior to such appointments and both parents shall be at liberty to attend such appointments. Both parents agree that no medical procedure or operation shall be performed on the child except with the written consent of both parents, except in the event of an emergency where the child requires immediate medical treatment as advised by the treating medical practitioner.
23.That these Orders shall be sufficient authority for the child’s treating practitioners and specialist practitioners or other health practitioners to provide any and all information relating to the child to both parents, however shall not be taken to discharge the parents’ obligations pursuant to Orders to keep each other informed of such information.
24.That both parents hereby authorise, by this Order, the school attended by the child to give each parent information about the child’s educational progress and other school related activities and supply them with copies of school reports, photographs, certificates obtained by the child and any newsletters, notices or other correspondence, documents or information relating to the child (at the requesting parent’s cost), however shall not be taken to discharge the parents’ obligations to keep each other informed of such information.
Non-Denigration
25.That during the time the child is with either parent, that parent shall:
(a)Respect the privacy of the other parent and refrain from questioning the child about the personal life of the other parent;
(b)Speak of the other parent respectfully;
(c)Not denigrate or insult the other parent in the presence or hearing of the child and use their best endeavours to ensure that others do not denigrate or insult the other parent in the hearing or presence of the child;
(d)Not denigrate or insult the other parent’s extended family in the presence or hearing of the child and use their best endeavours to ensure that others do not denigrate or insult the other parent’s extended family in the hearing or presence of the child; and
(e)Remove the child from any situation where they may be exposed to verbal, emotional or physical abuse.
Extra-curricular activities
26.That both parents shall keep the other parent informed of all sporting, cultural, artistic, developmental, or other community activities or other extra-curricular activities/events including any associated concerts, competitions, training, or meetings, whether arranged through the child’s school/s or independently outside of school and both parents shall be at liberty to attend such extra-curricular activities to which parents are invited regardless of who has the care of the child.
Travel
27.If either parent wishes to travel with the child outside the Commonwealth of Australia during the time which they are not ordinarily spending time with the child, the departing parent shall provide the non-traveling parent with no less than fourteen (14) days prior written notice (“Notice”) of the proposed travel and obtain the non-traveling parent’s written consent with such consent not to be unreasonably withheld.
28.If either party wishes to travel with the child outside the Commonwealth of Australia during the time they are ordinarily spending time with the child, the departing parent shall provide the non-traveling parent with no less than fourteen (14) days prior written notice (“Notice”) of the proposed travel.
29.The Notice referred to above and herein is to include the following details:
(a)The period of proposed absence from the State or the Commonwealth of Australia;
(b)A copy of the travel itinerary or any other documentation evidencing the proposed destination(s) and the dates and times of departure and return; and
(c)All complete addresses, telephone numbers or other contact details where the non-travelling parent can contact the child during the travel period.
Passports
30.That the parents do all acts and sign all documents necessary to issue and/or keep the child’s Australian Passport (“the passport”) current at all times until the child attains the age of eighteen (18) years.
31.That the costs in maintaining the passport for the purposes of these Orders be borne by the parties equally, unless otherwise agreed between the parents.
32.In the event that either parent fails to comply with a request within twenty-eight (28) days of being provided the necessary documents to issue and/or renew the passport, either parent be at liberty to provide a copy of this Order to the Australian Department of Foreign Affairs and Trade to dispense with the requirement to obtain the defaulting parent’s signature on the application/s to renew and/or issue the said passport/s.
33.The wife shall retain the passport.
34.The husband shall provide a request to the wife for the release of the passport in the event that the passport is required to facilitate the child’s overseas travel, with such a request to be made within twenty-one (21) days of the child’s proposed overseas travel.
35.Upon request from the husband for the passport, the wife shall release the passport to the husband at least seven (7) days prior to the proposed overseas travel.
36.Any request for the release of the passport by the husband to facilitate overseas travel shall not be unreasonably refused.
37.The husband shall return the passport to the wife within forty-eight (48) hours of the child’s return from overseas travel.
Dispute Resolution
38.That the process to be used for resolving future disputes about the care arrangements for the child, or the terms or operation of these Orders, shall be as follows:
(a)The parents shall consult with a Family Dispute Resolution Practitioner to assist in resolving any dispute or reaching agreement about changes to be made;
(b)The parents shall equally share the cost of the Family Dispute Resolution Practitioner;
(c)That in the event the parents cannot agree on a Family Dispute Resolution Practitioner, the wife shall nominate three (3) practitioners within seven (7) days of their inability to agree and advise the husband in writing details as to each practitioner’s fees, experience and availability;
(d)That the husband shall choose one of the listed practitioners within seven (7) days of receipt of the list;
(e)That if the husband fails to choose a practitioner within seven (7) days, then the wife may choose; and
(f)That both parents are to attend upon the nominated Family Dispute Resolution Practitioner and endeavour to reach agreement in respect of the matters in dispute.
39.Before any application is made to a Court for a variation of these Orders to take into account the changing needs of the child each parent is to take the steps referred to in the Dispute Resolution procedure referred to above and herein.
PROPERTY
40.Within 14 days of these orders, the husband is to advise the wife whether he elects to pay her the sum of $718,528, or proceed with a sale of the property at C Street, Suburb D, NSW situated on Lot … of section …, deposited plan … at Suburb D on Title Diagram … (“the Suburb D property”).
41.In the event that the husband elects to pay the wife the sum of $718,528, then it is to be paid within 90 days of these orders (“the payment”).
42.That contemporaneously with the payment:
(a)The husband is to transfer to the wife all his right, title and interest in the real property situated at E Street, Suburb F, NSW situated on Lot …, deposited plan … at Suburb F on Title Diagram … (“Suburb F property”);
(b)The wife is to cause the husband to be released from liability in respect of the mortgage to the National Australia Bank secured over the Suburb F property, being mortgage …91 having account number ending in #...87;
(c)The wife is to cause the mortgage to the National Australia Bank over the Suburb D property registered in the name of the husband being an account number ending in #...83, to be discharged in full.
Sale of Suburb D Property
43.If the husband either elects to proceed with the sale of Suburb D, or if he fails to pay the wife the entire sum of the payment due under Order 41 within 90 days, then Orders 44 to 53 will become operative, but not otherwise.
44.The husband and wife do all acts and things, and sign all such documents, deeds and instruments necessary to forthwith place the Suburb D property for sale.
45.The Suburb D property be placed on the market for sale by a real estate agent of New South Wales, agreed to by the husband and wife, and failing agreement, an agent nominated by the NSW Real Estate Institute, at a price determined by the real estate agent.
46.That pending the completion of the sale of the Suburb D property, the husband and wife be restrained from further encumbering the Suburb D property or increasing the amount owing secured by the mortgage.
47.In the event that the Suburb D property fails to be sold by private treaty within three (3) months of the date of it being listed for sale, then each party will take all necessary steps and execute all necessary documents to cause the Suburb D property to be sold by auction at the earliest possible date six (6) weeks after the expiration of three (3) months from the time of the listing of the Suburb D property, at a reserve as agreed in writing between the parties and failing such agreement, to be determined by calculating the average of two (2) real estate agent’s updated opinions, being one (1) agent elected by the husband and one (1) agent elected by the wife.
48.In the event that the Suburb D property does not sell at auction, the parties will sign all documents, deeds and instruments necessary to cause the Suburb D property sale price to be lowered by $50,000 and remain on the market at that price.
49.That in the event that the Suburb D property does not sell within one (1) month of the price reduction, a further lowering of the sale price of $50,000 is to occur each month until the property is sold.
50.That during the period in which the Suburb D property is to be marketed for sale, the husband will do all such things necessary to promote the marketing presentation of the property including:
(a)Keeping the grounds maintained and the Suburb D property in a tidy and acceptable state;
(b)Providing a set of keys to the real estate agent to access the Suburb D property and for the real estate agent to retain those keys until the sale is finalised;
(c)Allowing inspection and any private inspections arranged by the appointed real estate agent and actively maintaining the Suburb D property for such inspections.
51.The proceeds of the sale of the Suburb D property will be distributed as follows and in this order:
(a)Payment of agent’s commission, advertising expenses, legal expenses or any other expenses associated with the sale of the Suburb D property;
(b)Payment of the mortgage to the National Australia Bank to discharge the mortgage …27 held by the National Australia Bank held over the Suburb D property and full payment of the related loan accounts #...58, #...83, #...47;
(c)That $423,000 be deposited into the trust account of Bennett & Philp Lawyers for the purposes of the payment of the CGT liability arising from the sale of the Suburb D property, and the husband shall cause the submission of his tax return within 30 days of the end of the financial year in which the Suburb D property is sold and these orders authorise Bennett & Philp Lawyers to pay up to $423,000 of the relevant assessed CGT liability to the Australian Taxation Officer and that any remaining funds be distributed 57.5 per cent to the husband and 42.5 per cent to the wife.
(d)Providing there are sufficient funds, payment of so much of the mortgage to the National Australia Bank to discharge the mortgage …91 held by the National Australia Bank and related loan account #...87 held over the Suburb F property as is required to effect a 42.5 per cent property settlement in the wife’s favour.
(e)Any council rates or water charges that are in arrears.
(f)Any remaining sale proceeds to be deposited into the solicitor’s trust account of Bennett & Philp Lawyers pending final distribution of the sale proceeds such that the husband shall retain a 57.5 per cent and the wife retain a 42.5 per cent share of the net property pool, and for the purposes of this calculation, the values and the ownership in the reasons for judgment delivered on 7 September 2023 are to be applied.
(g)In the event that there are insufficient funds to wholly discharge the mortgages relating to Suburb F, then the wife is to refinance such borrowings so as to remove the husband as a borrower.
52.That during the period in which the Suburb D property is to be marketed for sale, the husband and wife are restrained from doing anything to prevent or hinder the sale of the Suburb D property or the preparations for sale.
53.That during the period in which the Suburb D property is to be marketed for sale, the husband will be responsible for the payment of and shall indemnify the wife in respect of:
(a)All mortgage repayments;
(b)All outgoings with respect to the land including council rates and water charges and any arrears of those charges.
Transfer of Suburb F property
54.That contemporaneously with the discharge of the mortgage over the Suburb F property, the husband and wife will do all such acts and things and sign all documents to transfer to the wife, the husband’s whole right, title and interest in the Suburb F property.
55.That pending the transfer of the Suburb F property to the wife, neither party shall further mortgage, encumber or otherwise offer the Suburb F property for security purposes other than for the purposes of giving effect to these orders.
Motor Vehicles
56.That the husband shall retain, to the exclusion of the wife, the following items registered in his name:
(a)Motor Vehicle 1;
(b)Motor Vehicle 2.
57.That the wife shall retain, to the exclusion of the husband, the following vehicles registered in her name:
(a)Motor Vehicle 3;
(b)Motor Vehicle 4.
Superannuation split: Superannuation Fund 1
58.That this Order is binding on the Trustee of Superannuation Fund 1, being G Pty Ltd.
59.That the base amount of $100,000 be allocated to the wife, out of the interest of the husband’s Superannuation Fund 1, member number ….
60.That pursuant to s 90XT(1)(a) of Family Law Act 1975 (Cth) whenever a splittable payment becomes payable in respect of the interest of the husband in Superannuation Fund 1, member number …, the wife shall be entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (Cth) (“the Regulations”) using the base amount and there should be a corresponding reduction in the entitlement of the person to whom a splittable payment would have been made but for these orders.
61.That these superannuation splitting orders have effect from the operative time.
62.The operative time is four (4) business days after the date of service of this Order upon the Trustee (G Pty Ltd) of Superannuation Fund 1.
Superannuation split: Superannuation Fund 2
63.That this Order is binding on the Trustee of Superannuation Fund 2, being Superannuation Fund 2 Pty Ltd.
64.That the base amount of $25,000 be allocated to the wife, out of the interest of the husband’s Superannuation Fund 2, member number ….
65.That pursuant to s 90XT(1)(a) of Family Law Act 1975 (Cth) whenever a splittable payment becomes payable in respect of the interest of the husband in Superannuation Fund 2, member number …, the wife shall be entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (Cth) (“the Regulations”) using the base amount and there should be a corresponding reduction in the entitlement of the person to whom a splittable payment would have been made but for these orders.
66.That these superannuation splitting orders have effect from the operative time.
67.The operative time is four (4) business days after the date of service of this Order upon the Trustee (Superannuation Fund 2 Pty Ltd) of Superannuation Fund 2.
Remaining superannuation
68.That following the superannuation splitting orders referred to above, the husband be declared, to the exclusion of the wife, to hold sole right, title and interest in his superannuation accounts and shall make no claim on the superannuation entitlements held by the wife.
69.The wife be declared, to the exclusion of the husband, to hold sole right, title and interest in her superannuation accounts and shall make no further claim on the superannuation entitlements held by the husband save for the superannuation splitting orders referred to above.
Bank Accounts
70.That the husband be declared to hold the sole right, title and interest in funds held in the husband’s sole name and shall make no claim on the funds held in any bank account in the wife’s sole name.
71.That the wife be declared to hold the sole right, title and interest in funds held in any bank account in the wife’s sole name and shall make no claim on the funds held in any bank account in the husband’s sole name.
Other orders
72.That from the date of these Orders and unless otherwise specified in this Order except for the purposes of enforcing payment of any money due under these or any subsequent Orders, each party shall be solely entitled to the exclusion of the other to all property in the possession of such party as at this date including any jewellery, furniture, furnishings and personal effects.
73.That the husband indemnify the wife and keep her indemnified in relation to any liability whatsoever that the husband has now or may have in the future including any tax liability payable by the husband and any CGT arising from the sale of the Suburb D property.
74.Each party be solely liable for and indemnify the other against any liability in their name, whether solely or held jointly with a third party, encumbering any item of property to which that party is entitled pursuant to these Orders, including but not limited to the parties’ individual liabilities to the Australian Taxation Office.
Registrar to give effect
75.That in default of the parties or either party from doing all acts and things and executing all such documents as are necessary to give effect to these Orders, a Registrar of the Federal Circuit Court and Family Court of Australia be appointed pursuant to s 106A of the Family Law Act 1975 (Cth) to execute all such documents in the name of the party in default and to do all such acts and things necessary to give validity and operation to the said orders.
76.That an affidavit of the solicitor of the party seeking to enforce the terms of the Order against the other party who has refused or neglected to comply with the provisions shall be sufficient evidence to the effect that there has been a refusal or neglect to comply and that the Registrar is entitled to rely upon that affidavit to exercise his or her power under s 106A of the Family Law Act 1975 (Cth).
77.That the costs of and incidental to any such necessary application pursuant to s 106A of the Family Law Act 1975 (Cth) shall be payable by the defaulting party to the other party.
78.Otherwise all extant applications are dismissed and the matter is removed from the list of active pending cases.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
TREE J:
INTRODUCTION
By his Amended Initiating Application filed 22 April 2023, Mr Hafner (“the husband”) seeks final parenting orders in relation to eight year old X, (“the child”), the only child from the parties’ relationship, together with final property settlement orders. Ms Hafner (“the wife”) seeks markedly different parenting and property orders in her Amended Response filed 24 April 2023. That said, the orders for which the parties ultimately contended changed during the trial of the proceedings.
That trial concluded before me on 15 June 2023, when I reserved my decision. This is that decision and the reasons for it.
BACKGROUND
Although I shall need to set out further factual material relevant to the parenting and property proceedings when individually considering those claims, some general background is appropriate at the outset.
The husband was born in 1970 and is currently 53 years of age. He is a professional. Prior to meeting the wife, he had been married, to which marriage one child, H, now 16 years of age, was born.
The wife was born in 1975 and is presently 47 years of age. She has qualifications as an allied health professional, and has mostly worked in that area. Before meeting the husband, she too was previously married, to which marriage two sons, Mr J, now 21 years of age and Mr K, now 18 years of age, were born.
The parties met in 2010, commenced cohabitation in 2013, and separated either on 19 March 2021 (according to the husband) or 20 April 2023 (according to the wife). That latter date is, of course, noteworthy because by then, not only were the parties embroiled in this acrimonious litigation, but only a week later it was set down for trial. It is all the more remarkable as there is no dispute that up until April 2023 the parties engaged in sexual relations with each other, although the husband denies this was in the context of an intact relationship. Therefore it is not contentious that only some two months before the trial before me commenced, the parties remained intimate. Given that their marriage was characterised by conflict, separation, and sexual relations continuing between them whilst living apart, there is ample room to speculate that the parties’ relationship has not in fact finally ceased. Indeed the parties remain married, with neither planning to divorce, and both apparently expressly contemplating reforming their relationship sometime in the future.
THE PARENTING PROCEEDINGS
Ultimately both parties agreed that they should equally share parental responsibility for the child, such that the remaining parenting dispute between them was slender, being how quickly the time which the child spends with the husband should increase, and when and at what frequency it should plateau. Little evidentiary assistance was offered in resolving that dispute, as the relevant expert witness Ms L, expressly refused to offer any specific recommendations and relevant primary evidence was scant.
During school terms, the child is presently spending two consecutive nights a fortnight in the husband’s care, and the rest with the wife. The wife proposes that arrangement should continue until 2024, but the husband proposes it should immediately move to a block of three nights per fortnight. In 2024, the wife proposes it move to a three night block, with the husband proposing four nights. In 2025, the wife proposes four nights, and the husband proposes five nights. Both parties propose that whatever arrangement be ordered, it plateau at the 2025 level.
There is a not dissimilar dispute in relation to the school holiday time, albeit the parties agree that for the 2023 term 2 and 3 holidays the child should spend three nights with the husband in week 1 and two nights in week 2.
In the 2023 Christmas school holidays the husband wants to continue that mid-year holiday regime in weeks 1 and 2, and 4 and 5, with the child not spending time with the husband in weeks 3 and 6. The wife proposes a 5/9 split of time each fortnight, with the five days being in one block, and indeed this is the arrangement she contemplates for all Christmas school holidays thereafter.
There is a curiosity to this, in that in the 2023 Christmas school holidays, the wife is proposing three blocks of five days, or 15 nights in total, whereas the husband is proposing two three night blocks (i.e. 6 nights) and two, two-night blocks (i.e. four nights), being a total of 10 nights, only 2/3 of the time the wife is offering. Why the husband did not accept the wife’s proposal is unclear.
As to the first three school holidays in 2024, in all of them the husband proposes the child spend four nights in week 1 with him, and two nights in week 2, and during the 2024 Christmas school holidays, three nights in weeks 1, 2, 4 and 5. The wife’s proposal for the 2024 term 1, 2 and 3 school holidays remains at five nights per fortnight with the husband, and her proposal for the Christmas school holidays remains as for 2023.
There is again the curiosity that the wife’s proposal for the 2024 Christmas school holidays of 15 nights in total is more generous to the husband than his own proposal of 12 nights. Why he rejects that is unclear.
In 2025 in the terms 1, 2 and 3 school holidays the husband proposes four nights in week 1 and three nights in week 2 (the wife remains at three nights in week 1 and two nights in week 2). At Christmas the husband’s proposal is that the child spend four nights with him in weeks 1 and 4, three nights in weeks 2 and 5, and no time in weeks 3 and 6 (the wife remains at five nights in weeks 1, 3 and 5). Although it may be tedious to again point it out, in terms of overall nights, the wife’s proposal remains – albeit only by one night – more generous to the husband than his own proposal.
Finally in 2026, and thereafter, the husband proposes during the term 1, 2 and 3 school holidays that the child spend four nights with him in week 1 and five nights in week 2, whereas the wife continues with the proposal as per earlier years of three nights in week 1 and two nights in week 2.
In relation to the Christmas school holidays in 2026 and thereafter, the husband proposes four nights in weeks 1 and 4, and five nights in weeks 2 and 5 with no time in weeks 3 and 6, hence a total of 18 nights, whereas the wife continues to seek 15 nights, and differently configured. This is the first year that the husband’s proposal exceeds the number of nights of the wife’s.
The reason for this disparity in proposals – at least as regards school term time and holidays at the end of terms 1, 2 and 3 – is that the wife contends that her proposal best protects the child from the risks of harm which she says the husband’s household poses, whereas the husband denies those risks, and says his proposal best promotes a meaningful relationship between him and the child (and perhaps H and the child). It can be seen then that this case involves the fairly common tension between ss 60CC(2)(a) and (b) of the Family Law Act 1975 (Cth) (“the Act”).
The risk of harm which the wife says the husband’s household poses to the child is one of emotional harm, perhaps manifesting itself as generalised anxiety in the child, and with a risk of harming the child’s presently good relationship with the husband.
To understand that, some more facts are needed.
H has been diagnosed with autism, and presents some parenting challenges. Since his mother unfortunately died in 2022, H has been living full-time with the husband. The husband has a fairly rigid parenting style, and at least sometimes his approach to getting H to comply with his requests is to yell at him. It is significant to note what the child told Ms L, a social worker who undertook a Child Impact Assessment in late 2022, (not long after H’s mother had died):
23.When asked if anything had happened at his father’s house to make him feel worried, [the child] responded “Sometimes my dad yells at [H]. He likes to yell at him.” [The child] said when this happens, he stays in his father’s room watching television, “but I also feel scared and worried.” (Q. Has Dad yelled at you?) “Not very much.” (Q. Is there anything else at Dad’s house that make you worry?) “No, I think that is all.” [The child] said he did not feel able to talk to his father about his worries in this regard.
24.When asked if he was worried at other times, [the child] stated, “Sometimes my mum yells at my brothers when they don’t clean, that is the only thing I get worried about.” He said when this happens, “I just tell mum to try and relax and sometimes it works and sometimes it doesn’t.”
25.[The child] told the writer, “The number one worry is when people yell.”
26.When asked what the adults in his life could do differently to make things better for him, [the child] said, “Maybe my Mum could stay there (at the father’s home) sometimes, and my dad could also be there. The only worry is sometimes they yell.” He also thought the father could come to the mother’s house and play cricket with him.
27.[The child] said the arrangements which would work best for him are, “Maybe every Sunday and Saturdays my dad could come over. We still have the sports equipment so me and Dad could do the sports together.”
28.When asked about sleepovers at his father’s, [the child] said he has trouble going to sleep and trouble staying asleep at his father’s house. He stated, “I don’t feel too good” and he said it feels “scary” and he is “nervous” “a bit worried, not completely happy” when he has to sleep at his father’s house. When asked whether this was because of his father or other reasons, [the child] responded, “mostly because of Dad’s yelling but sometimes it is because I don’t sleep well and Dad sleeps a lot and I wake up way earlier than him, just before sunrise.”
29.[The child] said his father knows about his trouble sleeping at his house and, “He tries and calms me down. I am crying and upset. I miss mum a lot when I am at Dad’s.”
(Emphasis added) (Footnote omitted)
Later, under the heading “Child Impact Analysis” and sub-heading “Safety, Harm and Risk Considerations”, Ms L continued:
37.The mother reported that her main concern is that when the father’s coping capacity is over-extended his emotional state can become dysregulated, and he can become aggressive. She said she has seen the father manage the behaviour of his oldest son [H] [sic] (who has autism) in a dysregulated manner, tending to have outbursts and shouting at him. She also reported personally experiencing the father’s (alleged) dysregulated, aggressive emotional state during the parental relationship. When the father was asked about his behaviour towards [H] [sic] he said, “It has been challenging; there have been times I reflect and think I should have handled things a bit differently.”
(Emphasis added)
Later still she opined:
48.The key issue identified in this matter is [the child’s] anxiety and in particular, his struggles to stay overnight with his father. Both parents recognise this but have different strategies to manage such which has led to the current dispute. Specifically, the mother prefers an approach where the situation is avoided and the father prefers an approach where [the child’s] staying overnight with him is enforced, in order to provide the opportunity for [the child] to become more comfortable and confident with overnight time.
49.The writer’s view is that although [the child’s] sleeping away from the mother’s household is the most obvious sign of anxiety, [the child’s] anxiety is becoming more generalised to include other situations. Given this, it is essential that [the child’s] general anxiety and his specific anxiety regarding staying overnight at his father’s home is immediately addressed by way of therapeutic intervention which includes [the child] and both of his parents.
(Emphasis added)
The difficulty with that evidence is that it is now quite dated, and Ms L has not engaged with the parties or the child since writing her report. Moreover, in her oral evidence, she was at pains to emphasise that her report was only ever intended to guide interim, not final, orders, and was not a full family report. She therefore quite appropriately refused to speculate on any specifics, emphasising that she would need to interview the child again before she could do so. However she did say that whilst generally an eight year old child could normally cope with significant increases of time with a parent, this child has anxiety issues, and hence the general expectations might not apply.
The wife contends that the husband continues to yell at H, and hence the risk of harm continues. In her oral evidence-in-chief, the wife said that the child still shows anxiety at the prospect of spending time with the husband, and argues this points, in some way, to the risks in the husband’s household continuing to manifest themselves. (She also advanced a claim that the husband’s previous misconduct, some admitted, some not, of allegedly throwing or kicking things at her, somehow means he is a poor parent. Even if historically that be so, unless the parties resume living together, there is no prospect of such behaviour recurring, and hence I need not consider it further).
In cross-examination the husband accepted that he “occasionally” will still yell at H, however he says he uses techniques which he learnt in about 2017 to control his anger.
Of course, critically what is missing is any non-partisan exploration of the child’s recent experience in the husband’s household. Unfortunately that makes even a rudimentary risk assessment extremely fraught, as neither the likelihood of the husband yelling at H, nor if he does so, can the magnitude of the risk of the child suffering harm, be gauged.
In those circumstances, s 60CC(2A) of the Act has work to do here, as it requires me to give greater weight to the need to protect the child from harm, than the benefit of a meaningful relationship with the husband. Indeed even if strictly speaking the husband’s yelling at H is not “abuse, neglect or family violence” as defined in the Act, no matter what the yelling is best characterised as, it plainly presents a real risk of harm to the child, and I would give the need to protect him from that risk considerable weight, quite apart from s 60CC(2A).
Moreover, as Ms L opined, it is the quality of a child’s time with a parent, rather than the quantity of it, which is important, something perhaps inferentially recognised by s 60CC(2)(a) given the way in which it is expressed.
I will therefore proceed cautiously and conservatively in respect of both the rate of increase of the time which the child spends with the husband, and the level at which it plateaus, and hence, notwithstanding the curious anomalies in relation to her proposed Christmas holiday time until 2026, I am satisfied that the orders as proposed by the wife are more in the child’s best interests than those proffered by the husband.
The only exception is something to which I have not previously alluded, namely that the husband seeks specific orders for Easter, whereas the wife says the parties should take “pot luck” as to whether Easter Sunday falls on days when the child would otherwise be in their care. As a general rule, I think Easter should be shared over alternate years, and “pot luck” a recipe for further disputation. I will therefore make an order for Easter time as the husband proposes.
I should briefly address whether I am obliged to consider s 65DAA of the Act. The wife contended that, since an order for equal shared parental responsibility was being made, in effect by consent, s 65DAA(6) absolved me from compliance with the balance of that section. Whilst given that the definition of parenting order in s 64B(2)(c) includes an order for parental responsibility, the wife’s argument may be technically correct, it seems to fly in the face of the intention of s 65DAA. However, and in any event, neither party proposed an equal time arrangement, which I am satisfied would be neither in the child’s best interests nor reasonably practicable given “the impact that an arrangement of that kind would have on the child” (s 65DAA(5)(d)).
That said the arrangement contemplated by the wife’s proposed orders does, from at least 2025, and arguably 2024, comprise substantial and significant time, which orders I am satisfied are in the child’s best interests and reasonably practicable.
THE PROPERTY SETTLEMENT PROCEEDINGS
The trial
At times during the trial, I was extremely puzzled by the property proceedings. Four examples will give sufficient explanation.
The first is that the parties spent quite a deal of time and effort detailing their contentions as to the timings of their on-again, off-again relationship, so as to prove that their contended dates were the correct ones. However, when pressed, both counsel accepted that the parties’ contributions during the relationship were equal. Why then the dates of it were so relevant as to require such detailed attention, given that there is no dispute about what their various contributions were (as distinct from the weight they should have) is unclear.
Moreover, the terms of ss 79(4)(a) and (b) of the Act make it plain that it matters not whether the relevant contributions are made during or after the relationship, or indeed during some interregnum. As to s 79(4)(c) the wife, who contended a relationship of longer duration than the husband, did not seem to appreciate that if she was primarily caring for the child outside of a time when the relationship between the parties was intact, on one view her contribution in that regard was significantly greater than it otherwise would be.
The second is that much of the husband’s material, and had it not been nipped in the bud early, likely much of his counsel’s cross-examination of the wife, was, or would have been, devoted to trying to prove her allegedly numerous infidelities during the relationship (all of which were denied by her). That said, the husband was quite open – perhaps even gloatingly so – about his activities with other women during (as I understand it) periods when he asserted the parties’ relationship was not intact.
Not for the last 48 years has the parties’ fidelity been a pertinent matter in family law litigation in this country, unless it is otherwise relevant (for instance, if it poses risks to children). Yet in this case it seemed to be where the husband devoted much of his energy, and perhaps where most of his aspirations for the trial lay.
Thirdly, what is likely to have been the husband’s final proposal (there were many prior iterations and as I shall shortly explain, perhaps also a later one) for division of property, saw him pay the wife a cash sum of $175,000. Now it is true that his proposed orders also contemplated the discharge of a mortgage in the parties’ joint names in the sum of $125,827, so perhaps he was really suggesting a payment to her of about $300,000, but whatever be the sum, the mechanism by which it was to be paid to her was by the compulsory sale (in the sense that it was court ordered in the first instance, and not in the event of default in payment of any sum) of a property (“Suburb D”) which is in the husband’s sole name, which sale would, on the husband’s own case, precipitate a CGT liability of $423,190. When one considers that the husband’s equity in Suburb D is well over $2 million, and it is likely that he would be easily able to borrow $300,000 secured against that equity so as to pay the wife without the need to sell that property, it simply beggars belief that he would positively seek an order compelling the crystallisation of the CGT liability, which otherwise could be indefinitely deferred. Such explanation as his counsel proffered for doing so – that interest on the loan would not be tax deductible – even if correct, did nothing to dispel my concern about the husband’s case.
Fourthly, and finally for present purposes, but accepting there were more examples, consistently with his longstanding position, in his closing submissions, the husband’s counsel initially contended that there should be two pools of property. He further contended that the wife should be taken to have made no contribution to the first, which pool solely comprised Suburb D, and 50 per cent contribution to the second, which contained all other property. It was then said that both pools should be adjusted in the wife’s favour by 15 per cent reflective of s 75(2) factors. This was a little remarkable, given the wife herself only contended for a 5 per cent adjustment of the total pool for s 75(2) factors, but even more remarkable was that the husband’s counsel began to make submissions that the wife’s claimed s 75(2) adjustment was excessive.
After I pointed out to counsel that he was seeking a greater adjustment than was the wife, he then said he did not know what s 75(2) adjustment his client contended for, and it would take time for him to ascertain that. To give him that time, I adjourned for a few minutes.
When I resumed, surprisingly I was told that the two pool argument was no longer pressed, that the husband now contended that the wife had a 30 per cent contribution based entitlement to the sole pool, to which there should be a 5 per cent adjustment in her favour reflective of s 75(2) factors.
Then equally remarkably, the husband’s counsel sought to tender a document about the size of a small cash register receipt entitled “[Mr Hafner’s] AMENDED MINUTE 15 June 2023” which was marked for identification as MFI B. No submissions were thereafter addressed to this curiosity, and precisely what it was, or what I was being asked to do in respect of it, even now remains opaque.
That said, MFI B makes no claim for CGT in any sum as a liability (there is an entry “CTG …O” which may have been a reference to CGT) and perhaps proposes not only a cash adjustment to the wife of $150,000 (rather than $175,000 as his formal final minute contended) but also a super split of $300,000, rather than the $100,000 which his formal final minute proposed.
Had counsel deigned to do more than dramatically produce this unheralded document, for instance, by making submissions in relation to it, perhaps it might have been able to be understood, but that did not occur.
Just and equitable to adjust at all?
Neither party contended that the parties’ legal and equitable interests should remain where they lay, and rightly so, given the former matrimonial home (“Suburb F”) was jointly owned, and its purchase had been partly funded by a mortgage in joint names over Suburb D.
The duration of the relationship
As shall be seen, nothing much turns on when the relationship first commenced and when, assuming it has, it finally terminated; absolutely nothing turns on when it intermittently stopped and started again, and I decline to determine that dispute.
For what it is worth, I am satisfied that the relationship probably commenced in about 2010, as plainly the parties had some strong attraction and perhaps connection from then, and likely regarded themselves as a couple.
Likewise, although not of much significance, I am satisfied that, to the extent that they are presently separated, they arrived at that position around March 2021. The slender basis for that admittedly reluctant conclusion is that is what both parties told Ms L, at a time when the wife now contends the relationship subsisted. That then, and thereafter, the parties remained sexual partners – albeit perhaps not exclusive – is neither here nor there in the scheme of things.
The pool
The following items were contentious:
Parties’ bank accounts
The husband contended that the parties’ current bank accounts should be excluded from the pool. Only one account with a balance of $37,208, is of any potential materiality. It is derived principally from a relatively recent redundancy payment made to the husband when his employment was terminated in mid-2023. He had been working with that employer since 2021. Separation, according to the husband, occurred some four days later, when a letter from the wife’s solicitor forbade him from further attending the former matrimonial home and advised that the wife regarded the relationship as over.
I will include it in the pool, but treat it as a post separation contribution.
All other bank accounts will also be included in the pool.
Husband’s liabilities of $15,383
Rather counterintuitively, since it was at least seemingly against his interests to do so, the husband contended that arrears of rates, water rates and land tax over Suburb D should be removed from the balance sheet, as should his credit card balance. All were argued to be excluded as they had arisen post-separation. That may well be so, but they are still extant liabilities. I will include them in the balance sheet.
Liabilities of wife totalling $11,570
These liabilities relate to Mr J and Mr K’s school fees. The husband accepts that these are extant liabilities of the wife’s, but says that they should be excluded from the balance sheet as they could have been discharged by her with monies she received – on his case post-separation – from her former husband in respect of child support arrears which he owed her. Instead the husband says the wife put those monies towards her legal fees.
Generally speaking post-separation earnings may be deployed by a party as they see fit, including the payment of legal fees, without them being “added back”.
Since 18 October 2021, the wife has received a total of $43,239.05 in child support from her former husband (annexure MH-23 to the wife’s affidavit filed 5 June 2023) of which $5,286.28 has been received between January and April 2022.
To do as the husband proposes would penalise the wife by, in effect, adding back monies paid for legal fees, from her post-separation income.
I decline to do so.
The wife’s M Finance loan - $58,885
This appears to be a loan from a litigation funder (see letter Bennett & Philip Lawyers dated 8 June 2023, annexure MH-24 to the wife’s affidavit filed 5 June 2023) by recourse to which the wife has, in part, paid her lawyers in this litigation. I propose to exclude it from the balance sheet.
Capital Gains Tax
It is unclear whether the husband still contends that CGT liability arising from the sale of Suburb D should still be included in the balance sheet.
To telescope forward a little, as shall be shortly seen, I do not intend to require the husband to sell Suburb D under the orders I shall make, but to require its sale only if the husband elects to so proceed, or if he elects to pay the wife a specified sum of money, but defaults in doing so.
Thus I shall, in the first instance, exclude any amount for CGT in the balance sheet, however in the event that the husband elects to sell Suburb D, then CGT will be accommodated in the distribution of the proceeds of sale, and effectively thereby included in the balance sheet.
The wife’s Centrelink debt - $4,625
The wife contends that she has a liability to Centrelink in the sum of $4,625, comprising an overpayment of Family Tax Benefit in 2019. The husband appears not to concede that it ought be included as a liability, but the basis for his opposition is unclear. Given it seems to have arisen during the time between the initial commencement and final termination of the relationship, I shall include it in the balance sheet.
Fringe benefit
The husband possibly contends that a Fringe Benefits Tax liability of $11,237 should be recognised in the balance as an extant liability of his, but the evidence does not enable any detail of how a liability usually imposed on an employer has been visited on the husband, nor how it arose. I decline to include it.
Balance sheet
It therefore follows that, adopting the agreed values and my findings on the matters above, the balance sheet is as follows:
Description Ownership Value ASSETS Suburb F Joint $1,180,000 Suburb D Husband $2,750,000 Motor Vehicle 1 Husband $ 40,000 Motor Vehicle 2 Husband $ 12,000 Motor Vehicle 3 Wife $ 10,000 Motor Vehicle 4 Wife $ 4,000 N Bank #...79 Husband $ 37,208 NAB #...13 Husband $ 478 NAB #...94 Husband $ - N Bank #...22 Husband $ - N Bank #...92 Wife $ 1 N Bank #...62 Wife $ 5,015 Assets subtotal $ 4,038,702 LIABILITIES Home Loan Suburb F #...87 Joint $ 551,596 Home Loan Original Suburb D #...58 Husband $ 311,585 Home Loan Suburb F over Suburb D #...83 Joint $ 125,827 Loan Suburb D #...57 (“Interest in arrears”) Husband $ 41,905 Council and water rates in arrears Husband $ 2,169 Land tax in arrears Husband $ 8,798 Credit card Husband $ 4,416 School fees: P School Wife $ 8,570 School fees: Q School Wife $ 3,000 Centrelink debt: Family Tax Wife $ 4,625 Liabilities subtotal $1,062,491 SUPERANNUATION Name of Fund Type of interest Member Value Superannuation Fund 3 Accumulation Husband $ 14,993 Superannuation Fund 4 Accumulation Husband $ 8,296 Superannuation Fund 5 Accumulation Husband $ 21,408 Superannuation Fund 6 Defined Benefits Husband $ 88,337 Superannuation Fund 1 Accumulation Husband $121,220 Superannuation Fund 2 Accumulation Husband $147,902 Superannuation Fund 4 Accumulation Wife $42,857 Superannuation Fund 7 Accumulation Wife $ 10,173 Superannuation Fund 8 Accumulation Wife $98,066 Superannuation subtotal $553,252 TOTAL (assets – liabilities) $ 2,976,211 TOTAL (assets – liabilities + superannuation) $ 3,529,463 Contributions
Although highly disparate, the parties’ initial contributions do not markedly vary whether the relationship commenced in 2010 or 2013. Particularly, at the earlier date, the parties owned assets, of which by the later date, some in the wife’s name had been sold, but the proceeds remained represented in other assets.
As at 2013, the husband owned Suburb D, subject to a probably slightly smaller mortgage. As at 2010, it was valued as worth between $950,000 – $1 million, although in April 2020, the husband agreed for the purposes of his earlier family law proceedings, it was worth $1,050,000. As at that time its mortgage was $422,442, giving the husband equity in it of about $600,000.
Further, the husband had approximately $200,000 from his property settlement with his first wife, and superannuation, in respect of which no reliable value can be given (husband’s affidavit filed 24 May 2023, paragraph 34).
By 2013 the husband had purchased two further properties, and I infer he had equity in them of about $200,000 derived from his property settlement.
As to the wife, she estimates that as at 2010, she had assets with a net value of $150,000 (wife’s affidavit filed 5 June 2023, paragraph 209). Whilst by 2013 one of those real properties had been sold, I infer her position was not materially changed.
It follows that, whenever the relationship commenced, the husband made an overwhelmingly greater contribution than the wife, by at least a factor of four.
Moreover, his principal asset, Suburb D, remains in the pool, and the equity he has in it is far and away the parties’ most significant asset, having a value of $2,750,000, and securing mortgages of $479,317 (including the mortgage taken out to fund the purchase of Suburb F, or $353,490 excluding it). Given the net pool is a little over $3.5 million, plainly that initial contribution is deserving of considerable weight.
Thereafter, as I have already noted, the parties both concede their contributions during the relationship were equal.
Post-separation (by which I mean March 2021), I would assess contributions as favouring the wife, as she has been meeting the outgoings of Suburb F without assistance from the husband, save for some child support or the like, and has been the primary carer for the child. In so concluding I do not overlook the husband’s redundancy payment, nor for that matter his credit card liability.
Weighing those contributions is necessarily fraught, and the movement from words to numbers well recognised as incapable of perfect explanation. However I am satisfied that a 35 per cent contribution based entitlement for the wife, and thus a 65 per cent contribution based entitlement for the husband, properly reflects a holistic assessment of the parties’ myriad contributions.
Section 75(2) factors
As I have already observed, the husband, based on an initially proffered two pool approach, contended for a 15 per cent s 75(2) adjustment in favour of the wife, whereas on her proposed single pool 45 per cent contribution based entitlement, the wife contended for a 5 per cent adjustment, which percentage was later also adopted by the husband. Of course I am not bound by the parties’ proposals, even if, as ultimately prevailed here, they agreed on the s 75(2) adjustment (albeit from different starting points as regards contribution based entitlement) in favour of the wife.
There are several significant s 75(2) factors. Firstly the wife’s capacity to earn income is less than the husband’s, and whilst exactly what the disparity is cannot be precisely ascertained, is likely to be somewhere around or above $50,000 per annum. That said, the wife is younger than the husband, so perhaps has a longer working life ahead of her than he does.
Secondly, the wife will remain the primary carer of the child under the orders I propose to make. Necessarily that requires her to provide the principal home for him, and will see her devote more time to his care than will the husband.
Thirdly, the wife also has the care of her two adult sons, they being the husband’s stepsons. They are both studying, and given their limited financial independence, most likely will live with the wife for some years. Whilst she may not have a “duty to maintain” them (s 75(2)(d)(ii)), I consider it a circumstance which the justice of the case requires to be taken into account (s 75(2)(o)).
Fourthly, there are the interrelated considerations of the terms of the otherwise proposed property orders, and the standard of living which is reasonable for the wife (which of course also overlaps with her earning capacity). A 35 per cent entitlement based on contributions would see a net entitlement for the wife to $1,235,312. Both parties propose that a substantial aspect of that would be superannuation – the wife says $276,096 (rounding up Superannuation Fund 2 split to $25,000), the husband $251,096 (or maybe $451,096 based on MFI B). But whatever be the superannuation component, the net cash payment would not permit the wife to keep Suburb F without significant borrowing. Thus, based upon her contribution entitlements only, she would likely be required to quit Suburb F and obtain alternative accommodation. Plainly during the relationship the husband accepted that living at Suburb F was an appropriate standard of living for the wife (and the child and his step-brothers).
There is a s 75(2) factor which favours the husband. He has the sole care of H, who will likely need to live with him for quite some years, and perhaps require the husband to financially support him too. Whilst H may have some prospect of obtaining funds from his late mother’s estate, the evidence could not possibly enable any ascertainment of the prospects of that, or any likely quantum. I give his prospect of inheritance little weight.
Weighing those matters in the balance tells strongly in favour of an adjustment to the wife under s 75(2) as both parties acknowledged, however I assess it at 7.5 per cent, being $264,709, bringing her total entitlement to 42.5 percent of the pool, or in dollar terms, $1,500,022.
Just and equitable
The overall outcome of a 42.5/57.5 split in the husband’s favour is just and equitable in that, not only does it properly reflect the statutory considerations, but on a practical level:
(a)it should enable both parties to adequately house themselves and their dependants, most notably the child;
(b)it should, if properly structured, give both of them a reasonable foundation for security in retirement;
(c)whilst, depending on the amount of superannuation which is included in the entitlement of the wife, it may still require the wife to borrow some funds to keep Suburb F, there is every reason to think that is not unrealistic given her evidence as to her borrowing capacity;
(d)Even if Suburb D is sold, such that CGT is incurred, and the net pool is reduced by whatever the liability is (estimated at $423,190) then although the wife will likely not receive sufficient funds to discharge in full both mortgages which relate to Suburb F, the evidence is that she should be able to borrow sufficient funds in her sole name to effect their discharge.
As to the amount of superannuation which should go to the wife, I conclude that $125,000 as sought by her is appropriate. If MFI B was intended to be a serious proposal that $300,000 of the wife’s entitlement should be met by recourse to a split of the husband’s superannuation, then whilst that may have been a pragmatic means of achieving a sensible settlement of the matter, I assess it as being too great a bias towards preserved funds to be just and equitable.
Particularly, on the wife’s proposal, she would take $276,096 in super, and the husband $277,156, which given her entitlement is only to 42.5 percent of the net pool, is already a disproportionate skew towards super.
I am satisfied that the two funds of the husband’s which the wife nominated to effect that split appear appropriate.
The net effect therefore will be that the wife will keep assets of $1,199,016, superannuation (including the $125,000 split) worth $276,096 and liabilities of $693,618, being a net position of $781,494.
To achieve her net entitlements of $1,500,022, the husband will need to pay her $718,528. There is no evidence as to his borrowing capacity, although it does not seem impossible that he could borrow against Suburb D to pay that amount, thereby avoiding any CGT liability.
There remains the question however, of whether I should compel the husband to sell Suburb D, in order to fund that payment, a matter which I shall now address.
Orders
Unless MFI B was intended to signify that the husband no longer sought the forced sale of Suburb D, then that compulsory sale is his proposal.
In an effort to illuminate a possible path forward for settlement without the need for sale of Suburb D, I had pointed out to the parties that a superannuation split in favour of the wife did not require borrowings to fund it, and the wife contended even on her own case that she had borrowing capacity. Perhaps it was that which prompted the $300,000 super payment in MFI B but as I have already noted, counsel did not explain that document.
I have considered whether I should only publish reasons with draft proposed orders, and seek further submissions, but upon reflection, other than fond hope, I doubt that at any re-convened hearing I would obtain any more assistance than I did at the trial.
Giving the husband the opportunity to refinance rather than sell Suburb D is plainly common sense; it stands to defer CGT until an actual need for sale arises, although I am conscious that might to a degree advantage the wife, in that the pool is not depleted by $423,000, so if it proves necessary to sell it, she should not obtain, in effect, a windfall.
I will pronounce orders giving the husband the opportunity to seek to refinance Suburb D so as to pay the wife the sum due to her under the orders. The sale will only be if he elects to so proceed, and I will give him 14 days to make that election. The orders will be cast so as in the former event, the amount does not factor in any deduction in respect of CGT, but in the event of sale, CGT will be taken as a liability. Such is a little clunky, but works better justice than any alternative.
OUTCOME
There will therefore be orders pronounced as set out at the commencement of these reasons. Otherwise all extant applications will be dismissed.
I certify that the preceding ninety-five (95) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Tree. Associate:
Dated: 7 September 2023
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